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Chaos Patch (#42)

Stranded in 90% disconnection, and completely out of touch with what the Internet has been up to — so this is a classic (link-free) CP. Open thread, as always. Turn-of-the-year themes would obviously be especially suitable — but anything (civil) goes.

82 Responses to this entry

Well, to get the ball rolling: you’ve said before that 2014 would be the year of the great schism between ‘Outer’ and ‘Inner’ NRx (which we can map as Tech-Comm v Neo-Feudalism with some accuracy). Although there’s been plenty of drama, especially over Ms Tunney, there hasn’t, that I can see, been a formal Unilateral Declaration of Secession. Why do you think that is? Is it still to come?

Outer-NRx is the name for exit-oriented experimentalists whose sole loyalties are to truth, weird fiction, and radical alienation. Formally, outer-nrx is a haunted back-door for every type of hyper-deracinated, treasonous, and irreligious individualist searching for what is simply the most extremist ideology of the pure outside, or multiple dimensionality. I for one am far too disillusioned to pretend to any kind of belief for social-utilitarian reasons, and as soon as there is found a territory further afield (to the right) I will abandon NRx quicker than you can say ‘quantum suicide’. Outer-nrx is a collection of (arcane) ideas combined with an aesthetic that spreads via contagion, with the major problem becoming disinfection/escape after initial contact. In other words, there is no unified movement to actively maintain. Inner-NRx is something different and far more groupish, with the attendant rhetoric of obligations, duties etc. It is the Dugin to tech-comms bitcoin.

Hurlock, Zerohedge is not looking at this right (as usual). If real wages were really crashing in the way Zerohedge says, do you think Abe would have strolled to a landslide re-election win a couple weeks ago? No way. The decline in wages may be a statistical thing having to do with the time lags between rising imports and a (still-to-happen) rise in exports and/or domestic growth. Don’t know for sure.

But a more relevant measure is corporate tax revenues, which rose 50% in fiscal 2014.

That, in turn, is setting the stage for Japan to slash the corporate tax rate at a steady pace. Here’s the finance minister (from December 19) saying he wants a 2.5-point cut this coming fiscal year (starts April 1) and further cuts coming in subsequent years til the rate gets below 30%.

QE is generating stronger tax revenues and that smooths the path for the structural reforms Japan needs to do — i.e. lower corporate tax rates.

This is how you do it. Europe gets the order wrong: They want the PIIGS to cut spending before monetary ease, but this creates political blowback because you push people out of their jobs into 24% unemployment. The right way to fix an uncompetitive economy (too-strong currency + too-high tax rates) is do QE first, and then use the tax windfall to get the tax rate down to a more pro-growth level.

“If real wages were really crashing in the way Zerohedge says, do you think Abe would have strolled to a landslide re-election win a couple weeks ago? No way. ”

Seriously what the fuck are you doing here?
You seem to still labor under the illusion that in a democracy if the government fails it shall be punished by ‘the people’ for it’s mistakes. That’s fairy-tale thinking. In the real world, governments do all kinds of retarded shit and get re-elected in spite of that. A lot of time actually even because of that. The people by and large are far too ignorant to be able to tell how seriously has the sovereign fucked up. So he can dupe them as much as he wants.

Seriously though, you are a firm believer in both modern economic ‘science, a fan of Ben Bernanke and you actually believe that if the government fucks up ‘the people’ are adequate enough to punish it in the next elections (as if electing the ‘other guys’ changes anything, but w/e).

You have all the common characteristics of a progressive democrat.
So what the hell are you doing here?

Your approach is giving us the destruction of entire nations in southern Europe. The PIIGS economies (plus France), strangled by a too-tight euro, are pushing out their best and brightest by the millions. In a democracy, if you want the culture, the nation, the people to survive and thrive, you’ve got to have suitable monetary policy. Since democracy includes no method for re-pricing contracts when periodic crises sink debtors or cripple the profitability of entrepreneurs, the only escape valve is currency devaluation. Hardhead 21st century Austrians don’t get that.

The kind of currency policy you want only makes sense in a monarchy, preferably one surrounded by other monarchies.

By the way, have you noticed the oil price? Down by nearly 50%. Where is that runaway inflation Zerohedge has been calling for all these years? I’t’s not happening because expanding monetary base is not the same thing as printing money. You need to watch a broader array of indicators (particularly M2). If you look at Japan’s M2, it’s now growing at 3% a year. Bank lending is also growing at about 3% a year. Dude this is not hyperinflationary money printing.

Kgaard Reply:December 29th, 2014 at 3:12 pm

Hurlock why don’t you propose some kind of bet that would test our disparate theories? I earlier proposed using the Japanese stock market as a proxy for the validity of my interpretation, but you took a pass, arguing (not unreasonably) that Japan could well go up if they printed too much money.

Surely there should be some market-based indicator that would signal, a year from today, that you were right and I was wrong?

Different T Reply:December 30th, 2014 at 12:43 pm

@kgaard

The kind of currency policy you want only makes sense in a monarchy, preferably one surrounded by other monarchies.

No it doesn’t. Why the strategy of appeasement with Hurlock. Has it ever worked? Even once?

————-

why don’t you propose some kind of bet that would test our disparate theories?

I would level the charge that you utilize incredibly compartmentalized thinking. “In another post you discuss the breakdown of the nuclear family as being a prime economic cause of many “troubles.”

The italicized line indicates your position is the correct mix of fiscal and monetary policy can “solve” what you perceive as something in need of fixing. This would appear to mean that you do not think the breakdown of the nuclear family (the relations among people) is of first importance, rather it can be corrected thru policy and your desired outcome can be maintained thru the correct prescription.”

As to your current discussion, Japan appears to be in a very unique, even “Goldilocks” scenario for monetary intervention. Japan is a high-trust, homogenous, and culturally domesticated society. They are an importer of energy which provides even more cover in the current environment. They are in a position to actually go “full helicopter” and give money directly to consumers (and this is part of the current policy).

Do you think this is likely to increase traditional family formation? I think it will accelerate its destruction. Do you think this is likely to strengthen the “soul” of its people? I think it will weaken and destroy it. Do you think this will reverse “dysgenic” trends? I think it will accelerate and (once the technology catches up and the people are desperate enough) perfect and idealize these “dysgenic” trends.

The right way to fix an uncompetitive economy

It is not clear why you still insist that “fixing” is the goal. I know you are familiar with the term “Neo-Feudalism.”

————-

On a not unrelated note, a comment stated “Neo-feudalism vs. Tech-Comm”. What is the thought process that puts these at odds with each other?

December is ending and the ebola death toll is just 7500 and infections are just 20,000. If true, this makes some of the panic from the global agencies silly. They didnt even implement everything they wanted to and infection rate seems to have peaked in October.

We cannot merely deduce that it wasn’t that bad because it isn’t what happened, what matters is the total consideration of possible alternate histories. What matters is the possible growth rate, and if it can double very frequently, it’s very dangerous.

Bryce … I think that was the theme for 2014, actually. Neoreaction has already won the intellectual battle. Now it’s just a matter, to borrow Fukuyama’s analogy from The End Of History, of the stray wagons pulling in to camp. You can see this in the way Sailer and Heartiste et al basically dominate the comment threads of all articles of any degree of contentiousness, though obviously in laundered form. The capper for me was the LA Times piece last week on the 10 most outrageous feminist statements (or something to that effect) of 2014. When the LA Times is there, it’s game over.

I find it strange that you would say that neoreaction has won the intellectual battle.

I think its very possible they won the intellectual preamble. Things like logic, rigor, and practicality are at the forefront of neoreactionary debate and this approach will always have more consistent truth discovery than other methods.

That said neoreaction still has so many avenues to work on that to say they ‘won’ the battle ignores the war. I think you have similar insights when it comes to the economics you argue here.

The demons that roost in intellectualism have overplayed their hand and some basic sanity is making a comeback. I wouldnt grant neoreaction that causal power.

The word “neoreaction” is seized by the mainstream media and diluted completely. Everything will be “neoreaction” all of a sudden, whether it has to do with Mencius Moldbug or whether it’s an army of two rednecks who’ve never heard of Moldbug trying to bring back the Third Reich in their underpopulated Midwestern town.

The term “neo-reactionary” has already be exosemantically applied to ENR groups, presumably because enough leftists continue to think their little term of derision has its old magic power. Of course, it does not, and the ENR will probably wave it proudly. Whether the presence of a hyphen is enough to distinguish it from Anglophone “neoreaction” remains to be seen. I propose “Menciist” a few months ago, and would be happy to pull it out of my back pocket if it comes to that.

Reactionary was already an insult. Neoreactionary form the medias standpoint is just taking an old insult that has lost its push and then implying delusion because ‘progress’ already ‘defeated’ reactionaries.

By “going mainstream” I mean that the insights will not merely happen to be occasionally mentioned [I’ve noticed certain memes trickling down, that’s not what I mean], they will be proposed and elaborated upon in explicit opposition to the Cathedral’s ideology. Think what #GamerGate represented for the Kulturkampf, but seeing it expand to the higher spheres of thought formation.

Or if you want to put it another way: Neoreactionary insights will be admitted to the discussion of our present crises. Wait for the longform investigative journalism piece to tie together the UVA rape hoax, Ferguson, and Rotherham into the theme of narrative manufacturing.

Bryce … I see your point … but I also think it’s highly noteworthy that neoreaction now dominates comment threads. The truth is in the comments — and will ALWAYS be in the comments — because the comments are anonymous. Any media that is supported by advertising (or state $$, in the case of universities) is automatically precluded from speaking truth. So I don’t see how neoreaction can ever get a fair shake in paid media.

When I proposed that 2014 was already the year of neoreaction, I was thinking of the path to acceptance traveled by Christianity and early US republicanism (i.e. the concepts of Locke and the founding fathers). In both cases their ideas won first — strictly in the REALM of ideas — and then those ideas manifest in the “real” world. So which victory was more important? Seems like that is a Plato vs. Aristotle sort of battle, come to think of it.

What I’d like to see—and it would be more useful than Anissimov’s poll—is NRx affinities plotted as a probability cloud on a ternary-diagram (simplex plot) w/ pure end-members representing each corner.

I’m taking offers. So far nothing. That’s noteworthy in itself. Any good monetary economic theory — especially if held in direct opposition to another theory — should instantly lend itself to wagers to determine who’s right and who’s wrong. The obvious ones here are commodity prices, CPI and bond yields. If one believes QE is hyperinflationary, then CPI, commodity prices and bond yields should all be rising. They aren’t, and haven’t been, and it’s been more than 5 years now since QE1 in the US.

The problem with using those kinds of measures is the very people interested in betting against you also believe those measures are themselves rigged/manipulated. That the economy is disconnected from reality. If we had a way of quantitatively measuring economic reality precisely, we would skip betting and just get rich. I really like the idea of finding a way to settle the argument with putting our money where our mouth is but setting up the bet short term is challenging given what your opposition believes.

It seems like in order to appreciate Austrian economics, you have to see every market indicator as some sort of illusion within a vast, all-encompassing demiurgic false reality.

Of course, that could entirely be what economics is in the first place.

Different T Reply:December 30th, 2014 at 11:48 pm

A better analogy would be pain-killers. If a doctor says, “Take these pain-killers so that you can do the rehab necessary to properly heal, then reduce the pain-killers to zero and you will be healed” vs. “Take these pain killers so you do not feel the damage and sit around.”

To kgaards “bet,” does he believe the stimulus measures will be removed when Japan’s GDP increases? Will the government stop sending aid to consumers (or indirectly by subsidizing businesses that pay higher wages)?

Which is more likely, the Fed raises rates for a sustained period or another round of QE in the US?

VXXC Reply:January 1st, 2015 at 9:33 pm

@Kggard,

” I think that was the theme for 2014, actually. Neoreaction has already won the intellectual battle.”

Why do you think this other than comments? It got on the radar screen surely.

But the law of gravity and sanity in the face of leaping off roofs insanity by the Leftist elites /=Neoreactodomandi.

Aeroguy: The core charge is that QE is inflationary (if not hyperinflationary). If Hurlock et al are not even willing to bet that QE will lead to a CPI rate over, say 5%, then they probably should just admit their model is wrong. Now, if one says “CPI is rigged” (which it sort of is, at least a little) there are always commodity prices to bet on (particularly gold and silver). So one could bet me that gold is going to, say, double. Back in the 70s gold went up 10x. Surely if we are repeating the 70s gold should at least double? And 10-year bond yields should go to 6%? Kyle Bass says Japanese bonds will collapse. I think he’s wrong. Does anyone want to take the over/under on 6%? Or even 5%?

Different T: Yes, I do believe the Japanese stimulus will be removed if the Bank of Japan gets where it is trying to go. Their market-based indicator would be something like the 10-year forward CPI breakeven. It’s now about 1.2%, which means investors are expecting 1.2% CPI ten years from now. If that number went to 3% Kuroda would back off on QE. The thing about QE is that you don’t have to do it forever. You do it to get out of the hole you are in.

Izak … I think you are on to something when you write “In order to appreciate Austrian economics, you have to see every market indicator as some sort of illusion within a vast, all-encompassing demiurgic false reality.” What you are describing is a theology. Austrian economics has a lot of great insights. It’s the modern-day interpreters of the Austrians who go overboard. When Hurlock asks me, “What the fuck are you doing here?” in response to my arguments against his brand of Austrian economics, he’s playing the role of the Roman Catholic inquisition against Galileo in 1610. I, in this case, am Galileo. I’m questioning the official doctrine of neoreaction, which cannot defend itself on monetary policy. The notion that QE causes hyperinflation — or even, necessarily, ANY inflation — is pure theology. It’s the weakest aspect of neoreactionary thought, bar none. Why is it that I’m the only one who is bringing this up? Are people too embarrassed by the losses on their gold portfolios?

The reason I care is that this has HUGE implications for every other aspect of social forecasting. If the economy is not going to collapse in a flaming heap of Venezuela-style hyperinflation, it means a lot of other things can go on for a long time too.

Different T: On the question of QE and Japanese birth rates, that’s an interesting one. I’m pretty sure inflation rates generally correspond positively to birth rates around the world, actually, but the causality is kind of muffled. I think QE is probably going to be good for birth rates, but that positive could be overshadowed by all the other birth-rate-negative forces in Japan.

Yeah I know you said some other interesting stuff in your two replies, I just didn’t have time to get to it all. I generally appreciate the line of critique you take. It’s at least fruitful. On the question of whether the Fed raises rates first or does more QE, I don’t really know. Just depends how the US and the world (particularly Europe) evolve. I don’t see it as a particularly illuminating bet. What do you think it would show if the US did more QE? That the US economy is not doing as well as thought? If so, what would that signify to you?

Different T Reply:December 31st, 2014 at 3:27 am

What do you think it would show if the US did more QE? That the US economy is not doing as well as thought? If so, what would that signify to you?

It is not clear why you still insist that “fixing” is the goal. I know you are familiar with the term “Neo-Feudalism.”

Different T Reply:December 31st, 2014 at 3:30 am

And from your perspecitve of “The thing about QE is that you don’t have to do it forever. You do it to get out of the hole you are in.”

What do you think it would show if the US did more QE?

Kgaard Reply:December 31st, 2014 at 3:41 am

@soapjackal

Different T … You are starting to lose me. I don’t understand where you’re going. Neo-feudalism is not a term I’ve ever used or thought much about. Why do I care about fixing our monetary policy? Monetary policy presents a fixable problem. If a problem can be fixed it probably should be. Nominal GDP targeting is a legit policy that can be run for 100 years. One does not need to blow up the current monetary system when tweaking it will do. Sounds like you might be suggesting we should blow it up on principle? I’m a bit lost. If that’s our position that’s fine but I don’t see where that goes. Certainly there are no real-world applications, except perhaps in the alt-currency realm, which can reasonably expected to continue growing (though as another commenter noted you can adjust for the wobbles of the current monetary policy via use of derivatives).

Different T Reply:December 31st, 2014 at 3:50 am

@Kgaard

You are starting to lose me

Clearly.

Monetary policy presents a fixable problem.

Monetary policy presents a set of “solutions” that have their own unique benefits and drawbacks, each creating beneficiaries and sufferers.

Sounds like you might be suggesting we should blow it up on principle?

It would help to not imply things if you’re “a bit lost.”

Neo-feudalism is not a term I’ve ever used or thought much about.

Apologies. It appears I should not assume things either.

Kgaard Reply:December 31st, 2014 at 3:05 pm

@soapjackal

Different T … Now you are just going Hurlock on me. You’re making some fundamental errors in your understanding of monetary policy and then making further conclusions based on those. I can’t follow where you’re going because it fundamentally doesn’t make sense. The reason I have proposed my bet (to which I have yet to get a useful response) is to smoke out people who think they understand monetary policy but really don’t. If you won’t even bet that QE will cause inflation in Japan, how can you start claiming that it’s going to break family bonds and further beat down fertility rates? Isn’t that kind of ridiculous — especially given that fertility probably corresponds better with inflation than deflation?

I understand the concept of sanctity of contract, but in a democracy you can’t HAVE pure sanctity of contract because the masses will always demand unbreakable — and deadly-generous — contracts for themselves. So until you get rid of contracts the best monetary policy is one that has some give in it — i.e. nominal GDP targeting.

You’re making some fundamental errors in your understanding of monetary policy and then making further conclusions based on those.

Where? Literally, where? Point to one.

You are projecting. Nothing more. You are not “over” Austrian-economics. If you were, you would not argue every idiot about it. You would ignore them. You also would not project an Austrian view on anyone who doesn’t think monetary policy is as effective as you claim.

If you won’t even bet that QE will cause inflation in Japan, how can you start claiming that it’s going to break family bonds and further beat down fertility rates?

I think it will act similar to welfare in the US. You do realize is not simply talking about QE, but also consumer aide and subsidizing businesses who increase wages.

Isn’t that kind of ridiculous

I do not consider economic policy externalities as “ridiculous,” no.

I understand the concept of sanctity of contract, but in a democracy you can’t HAVE pure sanctity of contract because the masses will always demand unbreakable — and deadly-generous — contracts for themselves.

Where has this been disputed. It has been agreed.

Your defensive post is projection. And revealing.

VXXC Reply:January 1st, 2015 at 9:40 pm

@Kggard,

Do you shop? For say Food? You haven’t noticed anything different there? I would think normally numbers fly up to your eyes, as say certain things about men fly to mine.

You’re living in a different reality Sir than the vast majority of Humanity, who are about to take a hand in their own fate with their survival at stake.

I put the other day on Twitter: The weak do what they can, the Strong do what they must. But when they’ve done what they must: STOP. Only do what you must. Doing what you can…is the province of the weak and the Strong should avoid it.

A lesson I think will be hard learned and only learned hard by you Sir and your class.

I put it in the context of “In Strife the weak do what they can, the Strong do what they must.”

The strife began 12/21, not so much with the political murders of two policemen, but when the NYPD turned their backs on power. For Tectonic plates just shifted under powers feet, and the earthquake is now certain. As it happens necessary, for now the Strong must do…what they must.

@NRx_N00B would be more interesting if it was at all effective to promote the trichotomy. Describing someones past affiliations as their only future path limits the options. This is troubling if the truly effective and moral options are cut out altogether from this.

2015 will bring very interesting developments. There has been a lull in the mainstream and the fringe and something is lurking. A bubble ready to burst.

Neoreactions bubble has been described prior by many critiques but as momentum grows and more are willing to actually challenge their minds (especially those who already are a part of the sphere) something will pop and the next level of work will begin.

Moldbug, Jim, Foseti and company were the 1st generation of nrx.

Land, Mike, Nyan, Wes, Dampier, etc etc was the 2nd generation.

The 3rd generation is on its way and I am very interested to see where that goes.

A friend of mine says that the library copy he read of _The Inevitability of Patriarchy_, by Steven Goldberg, was the most hatefully scribbled-in book he had ever seen. It has a wikipedia page. Apparently there is a sequel, _Why Men Rule_.

I am no ace, but I can recommend some fun books on comparative biology:
_Dr. Tatiana’s Sex Advice for All Creation_, by Olivia Judson
_The Third Chimpanzee_ and _Why Is Sex Fun_, by Jared Diamond
Just on general principles, I also recommend _The Selfish Gene_, by Richard Dawkins.

@soapjackal Without knowing anything whatsoever about economics (and having no interest in pretending that I do), I think Kgaard is usually the winner in these debates because he makes everyone get real mad.

VXXC … I actually started out as a gold guy. Interpreted the entire world through a gold-centric lens for 15 years. I got crushed in the 2008 crash precisely because I was so bent on the gold signal that I wasn’t watching the proper credit markets. That anecdote is perhaps neither here nor there … but I just want to point out that I am very very sympathetic to what gold says and was a true believer for a long time. The problem is … I’m convinced it doesn’t work as a standard. It’s my day job to watch all this stuff … emerging markets, developed markets, currencies etc etc. So I’ve thought about this a lot. No system is perfect. I’ve become sold on NGDP targeting. If you really look at the mechanics of it, it’s pretty good. Gold can sort of work, and did in the era of aristocracies — when only the economically successful could vote. But when everyone gets to vote gold just can’t work. There are too many demands on the politicians. It’s perhaps not coincidental (or, let’s say, only partially coincidental) that our two big devaluations, 1933 and 1971, came in the wake of expansion in suffrage rights.

I don’t know much about economics either, but my sense is quite different. Kgaard makes people mad because he is arguing about what to do within a democratic framework (in which economics has necessarily become irredeemably politicised). NRx is fundermmentaly about escaping democracy, not compromising with it. He might as well be arguing with people about who they should be voting for at the next election.

But that’s what I like about his whole angle. Everyone else in the NRx camp looks at rational choices within democracy playing out, and for everything else outside economics they have a sort of wizened detachment to what’s going on. But then they snort and chortle about economic choices because some politician isn’t coming along saying, “I propose that we violently smash the system and plunge everyone into unemployment and tough out stagflation in favor of a strong currency, because that’s the bitter pill to swallow, folks!” even though such a premise is ridiculous and even tea-party guys don’t want that. If the whole system is bogus, why mock guys like Abe and Bernanke for doing what little they can to work within its constraints? NRx guys can do the same thing with a staff writer for Slate magazine crying about racism or whatever, but when we switch Cathedral-style tactics to the level of the economic, all of that amused mastery disappears. All of a sudden, Bernanke or whoever is now the Fed chairman is outrageous and shocking. Kgaard is totally logical in what he’s saying, even though I get a sense that he’s being intentionally antagonistic when he says stuff like “we ought to build a statue for Bernanke!” He’s also shrewd enough to make a distinction between the Austrian school proper and the late-20th/21st century interpretation thereof from guys like Peter Schiff and Zero Hedge.

Here is a very tentative thought from a neophyte that I may regret posting later: All of economics seems to me like a faith-based system, and I don’t think it’s entirely wrong to say that it really *has* become a quasi-gnostic false reality after the US dollar was made into the global reserve currency. (Like when China purchases debt, it has no problem with the US being a debtor; it just wants to maintain the perception of the debt being valuable.) But by the same token, I think it takes as much faith to believe in a “strong” metal-backed currency as it does in an endlessly-printed fiat one. As a species, we seem to be far too abstract in our epistemologies for gold to ever make a comeback as a standard again. All of its mystical and religious associations have been lost, at least in the first world. Bitcoin could solve all our problems, but it seems at this point to be far too fragile and unstable of a commodity, and the US government is probably right not to be too worried about it. The encryption technique behind it seems much more threatening than the actual name-brand.

“All of economics seems to me like a faith-based system, and I don’t think it’s entirely wrong to say that it really *has* become a quasi-gnostic false reality after the US dollar was made into the global reserve currency.”

It is far easier. What is debt?

“But then they snort and chortle about economic choices because some politician isn’t coming along saying, “I propose that we violently smash the system and plunge everyone into unemployment and tough out stagflation in favor of a strong currency, because that’s the bitter pill to swallow, folks!” even though such a premise is ridiculous and even tea-party guys don’t want that. If the whole system is bogus, why mock guys like Abe and Bernanke for doing what little they can to work within its constraints? ”

That seems pretty accurate. The question, though, is whether Abe and Bernanke are “fixing” something. More fundamentally, is monetary policy capable of “presenting a fixable problem.” I think it would be pretty easy to find a quote from Bernanke himself talking about the limited effectiveness of monetary policy. Even if you granted kgaard monetary and fiscal policy to be whatever he wants, would it “fix” things?

e.g. “This would appear to mean that you do not think the breakdown of the nuclear family (the relations among people) is of first importance, rather it can be corrected thru policy and your desired outcome can be maintained thru the correct prescription.”

If you have some sort of “strong economy” in mind, can you divorce the people and their psychology from consideration and still maintain the outcome?

It is very easy to make the case for what kgaard advocates. Could he do so with a full understanding of the possible consequences?

Capital is infected with Sophism, spreading it to its new home. This process is one of the things often called ‘globalization.’…
Eventually, everyone in the new home develops resistance to Sophism, shedding its poison. In the meantime, much damage is done.
-Alrenous

e.g. “This would appear to mean that you do not think the breakdown of the nuclear family (the relations among people) is of first importance, rather it can be corrected thru policy and your desired outcome can be maintained thru the correct prescription.”

also applies to

“I propose that we violently smash the system and plunge everyone into unemployment and tough out stagflation in favor of a strong currency, because that’s the bitter pill to swallow, folks!”

I think the quote from Alrenous is a good one (if I understand it correctly), and it seems to correspond to what I’m trying to articulate about with false realities et al. Though I wonder if globalization provides the necessity for sophism rather than acts as a process subordinate to capital itself (which seems to be described by the tech-comm wing of NRx as an autonomous process with some sort of distinct telos).

I will let Kgaard say what he needs to say regarding the question of whether or not monetary policy can “fix” things rather than “maintain” them. I cannot speak for him. For the record, I see the Fed as pursuing the best possible maintenance policy, not fixing anything in a deeper essential sense. This seems to me what Kgaard is arguing. He doesn’t seem to think that the monetary policy is chiefly responsible for screwing up Japan and creating a culture of weird male herbivores who jack off to ecchi anime all day long. If that’s his view, I think I agree. The whole point of econ is to fix simple, practical problems. It can’t revolutionize a whole mentality or way of perceiving the world. The two problems are mutually irrelevant.

As a very vague heuristic (one which continues my unfinished tentative thought above), I suggest this possibility: What we’re witnessing with 21st century monetary policy is a transitive stage between two more stable technologies of currency distribution. The technology of gold coin minting worked for a long time, but it probably won’t ever work again, at least as something to sustain serious political power. One needs faith to assign value to a material item, and we’re at the point where we have the technological ability to assign wealth to other things. Whatever instincts we’ve evolve to have where we assign value to shiny items seem to have been subdued by a smorgasbord of virtual stimuli and artificially-assigned value determined through the consensus of subcultures. This is probably why welfare-class Americans love to have shiny things (like diamonds on their teeth), while managerial-class Americans don’t care half as much. At the same time, digitally encrypted currency is in its incipient stage, where just about anything can happen. For this reason, I don’t put much stock in Bitcoin, because some other company could easily replace it (like Facebook replacing Myspace). So for now, we have an anchorless globally-backed currency that completely depends upon false perceptions and confusion to sustain its value. (And the BRIC nations seem to have made no traction in replacing it with something more grounded, at least from what I gather.) You can understand 21st century currency mythopoetically as an unyoked, unharnessed, untamed black brood mare who needs to perpetually run away from its own shadow to survive. Quantitative easing is just one way to accommodate that state of affairs. The role of the monetary policy is to A) convince the masses that its shadow is something alien and external and B) to provide occasional carrots to assign a destination for it to run toward.

If none of this makes any sense, or if I’m missing something completely important, please let me know, and I will politely bow out of the discussion and leave Kgaard to continue onward with his guerilla warfare campaign, which at the very least provides some entertainment.

1) Bitcoin is not the answer. For it to work you still need a central banker – somebody to decide how many Bitcoins to print. That’s precisely what Bitcoin’s designer punted on. He chose to fix the number of Bitcoins that can ever be minted. The result is a currency whose price is wildly volatile – so volatile, in fact, that Bitcoin will never be able to serve two of the fundamental purposes of currency: unit of account and store of value.

2) I disagree that economies should be blown up because they are not on a gold standard. A gold standard is not better than NGDP targeting. In a democracy I would much rather have the latter.

3) I don’t think a gold standard necessarily helps with family formation or fertility rates because gold standards in democracies are crash-enablers. When a crash occurs on a gold standard, there is no give in the system, no mechanism for printing your way out of it. Depressions have a tendency to linger (1870s, 1930s, PIIGS today) and depressions are bad for fertility rates. Personally I think Sailer (Dirt Gap) and the Mouse Utopia guy have the best take on fertility rates: They fall when population densities get too high. The pill doesn’t help.

4) I don’t think there’s anything spooky or un-knowable about monetary policy. That’s a byproduct of the monetary model used by Jim Grant, in particular, and hardhead neo-Austrians in general. Grant’s idea is that, in a fiat system, demand for currency could evaporate overnight, leading to hyperinflation. Zerohedge thinks the same. They are both flat wrong. Central banks can reduce money supply any time they want via open market purchases. That’s what central banks DO. If a central bank is actively targeting a nominal GDP growth rate (or CPI rate), it would start cutting back on moneary base as soon as CPI threatened to exceed, say, 3-5%. Central bankers are very trigger happy in advanced countries (always wanting to raise rates at the first whiff of higher CPI), so the risk tends to be too-tight policy rather than too-loose policy.

5) The distinction between the original Austrians and the neo-Austrians (Zerohedge, Schiff et al) is CRUCIAL. The world is re-living the 1930s, and the critical political question in such times is whether to expand money supply to get nominal GDP moving (US and Japan approach), or make people suffer because it’s supposedly good for them (Germans’ approach to Southern Europe). This isn’t just an arcane issue, it’s the most important political issue in the world right now. Prolonged depression leads to war. As an aside, I had a boss once who argued that monetary policy is 4x more important than tax policy. It’s a reasonable claim.

6) Part of my disagreement with Different T regards whether Japan’s situation represents a “Goldilocks” scenario for QE. There are a bunch of places now using QE fruitfully: The US, UK, Japan and Sweden. The ECB is likely to join the group at its January 22 meeting. The drop in oil is not a freak lucky event making this all possible – it’s central to the overall dynamic in the world now (weak commodity prices).

7) Most of neoreactionary discussion involves things happening right now. There’s no reason monetary discussion shouldn’t do the same. In every other area of neoreaction the goal is to make things better. But in the realm of monetary policy there seems to be this idea that everything must be made far, far worse, just out of principle. But that is a terrible position – especially because neoreaction has not come up with anything better than NGDP targeting.

8) Looking ahead, the big problem in the world is far more likely to be deflation than inflation. Low population growth + explosive productivity growth + declining resource-usage intensity of each person (as people’s souls and eyeballs disappear into virtual realms) could create a massive crisis of capitalism. QE could be with us for a long time to come in such an environment – not to create hyperinflation but to stop prices from crashing. (I grant that permanent QE to prevent prices from falling indefinitely raises a bunch of tough questions.)

Thanks for the general response. Different T is more knowledgeable about these things than I am, so I’m sure his rejoinder will be sharper (and he will no doubt be annoyed by being lumped in with me as a target of response).

In the meantime, I’ll try to read some stuff about econ theory, like this Sumner dude you mentioned above. …if I have the time, anyhow.

“The result is a currency whose price is wildly volatile – so volatile, in fact, that Bitcoin will never be able to serve two of the fundamental purposes of currency: unit of account and store of value.”

That would never happen with our magic Fiat. Never.

Gold would make things worse: for Who? For people who need as much money as they need to create portfolios and hence their own wealth from absolutely nothing, and contributing absolutely nothing except to the manufacturers and providers of luxury goods. At no point would the so called Robber Barons – more correctly called Castle and Civilization Builders – have considered doing this.

As to the family being severely damaged and in some Thedes destroyed: that is not a function of Central Bank Fiat, it is an overarching goal of the State and we can’t simply blame it on monetary standard.
The entire left wing apparatus of the state, that is to say the state itself combines to destroy the family.

Yet it endures albeit with tremendous damage and human cost.

Feminism for instance is entirely dedicated to the destruction of the Father, but they did not invent this, the first instance I find in History is the Irish Penal Laws and they worked – for their intended purpose. The Irish had Cromwell, we have Family Court.

They had their revenge, we shall have ours.

As did the Irish. I think ours will be worse, simply because we’re bigger.

I am having his discussion, because like you, I would like future iterations not to throw away the lessons of modern economic and financial thought.

In fact, it would appear you are significantly less confident. With regards to Hurlock “arguments,” you stated the kind of currency policy you want only makes sense in a monarchy, preferably one surrounded by other monarchies.

I would argue only an incredibly desperate or idiotic monarch would follow such policy. And only a more desperate or more idiotic monarch would follow such policy if surrounded by other monarchs who utilize such policy.

That said, you truly have reading comprehension issues. Point 1 seems to be addressed to Izak. Points 2, 4, 5, 7, and 8 seem to be directed at Hurlock and he hasn’t said a thing in this thread since the 29th.

On point 3, you seem to have completely missed the content of the comment. The discussion is not about “fertility rates.” It is about traditional family formation, behavioral incentives, and dysgenics. Nor was their any discussion about a gold standard being better or worse.

On point 6, the “Goldilocks” comment could have been clearer. It is referencing the fact that Japan looks willing and able to actually directly stimulate demand through consumer aid and subsidies for higher wages. That would likely have been Bernanke’s (and now Yellen’s) dream.

But back to the start, in my opinion you are doing a disservice towards ensuring future iterations not throw away the lessons of modern economic and financial thought by over-promising and overestimating the effects of policy. Again, Monetary policy presents a set of “solutions” that have their own unique benefits and drawbacks, each creating beneficiaries and sufferers. Do you accept this?

The point I was making about gold standards only being suitable for monarchies was imperfectly phrased. The better way to say it would be this: If you want hard money, you need to have a low-tax, low-regulation society that can withstand and allow for rapid cuts in wages, utilities and every other cost to business during sharp downturns. Rothbard wrote a book, or a section of a book, about the depression of 1819. He argues that it was the last truly “cleansing” downturn the country ever had because contracts had not become entrenched. So, business owners could fire who they wanted, cut wages in half, etc etc and adjust to the new, tougher conditions. In such a way the depression ended in a reasonable time frame. That’s what I’m referring to when I say if you want a gold standard you need a monarchy. You need somebody at the top who will set and enforce a ruthlessly open economic policy.

On fertility rates and family formations, I don’t see why you are stuck on this. I understand the underlying concept — having a standard in money is similar to having a standard in family affairs. That’s a legit concept. But if the gold standard doesn’t work in democracies, what am I supposed to do about it? How is implementing an unsuitable monetary policy supposed to inculcate family values? In the wake of the Pill and the huge new opportunities for women, the two concerns are pretty much orthogonal to each other anyway.

On your statement, “Monetary policy presents a set of “solutions” that have their own unique benefits and drawbacks, each creating beneficiaries and sufferers.” Sure I accept that. But it doesn’t mean one policy isn’t better than another. For instance, if you’re a utility in Greece, deflationary depression is not so bad for you because you keep getting paid in euros at predetermined contractual rates. But it’s freaking horrible for everybody else. So clearly a change is needed.

I’m curious, are you in favour of preserving democracy / working within its constraints to achieved better governance? Or do you seek to replace it with another system, which you think will more reliably provide secure, responsible and effective government?

That’s the great question of the day! I don’t see how one can just “replace” democracy in places where it is entrenched. So what we’re seeing is experiments in non-democratic zones — Singapore, Dubai, HK, China. These work very well. That book Nick recommended, Extrastatecraft, has a fascinating section (really 1/3rd the book) on special economic zones, which are basically little monarchies. Did you know that 66 million people already live in these things? I didn’t. What struck me most was that these places are basically all giant sweatshops. I’m sure there is a way to have a purer sort of monarchy, more along the Peter Thiel model. And I don’t doubt that some of those will get set up.

There’s another good recent book by John Micklethwait called “The Fourth Revolution” and his argument is that we are on the cusp of a huge wave of change in how democratic governments are run. They are going to get a whole lot BETTER he argues, forced by popular discontent and the application of technology — the same technologies that have already been applied to cut costs in business. Pretty compelling arguments he makes, actually. If democratic government gets better in how it’s run, maybe there won’t ever be the need or impetus for overwhelming political change in western democracies.

“I don’t see how one can just “replace” democracy in places where it is entrenched.”

OK, great. This makes me even more curious. Moldbug spends quite a lot of time discussing precisely this problem – I take it that you don’t agree with any of his proposed solutions?

But do you agree with his analysis of power in the USG? Specifically, that the Cathedral manufactures consent, and that the extended civil service fragments power into smaller and smaller pieces while growing like a cancer through the creation of ever increasing quantities of camouflaged bureaucratic makework?

I haven’t checked out Extrastatecraft or the other text you refered to yet. But the idea of democratic government getting better rather than worse in terms of how it is run is certainly a novel one round these parts. One of Moldbug’s (or Plato, or Aristotle’s) central insights is that democracy is sclerotic: it inevitably decays over time. I would like to see the app that’s gonna change this basic law.

It seems that you come down in favour of voice over exit as well, is this correct?

How do you define yourself politically? As an open minded progressive?

Rasputin … Politically I define myself as a neoreactionary. I am all for right of exit, but again if the US is not about to turn into a monarchy, as a practical matter voice is going to be the driver of change in US policy. Where are 300 million people going to go? I admit I haven’t read Moldbug on the challenge of improving democracy. Can you point me to the relevant tracts?

The point of the Micklethwait book (The fourth revolution) is that we haven’t even started, really, trying to make government more efficient, but that movement is coming. You can see it in the republican takeover of statehouses etc.

In answer to your main question: if you haven’t read Moldbug on the challenge of improving Democracy, arguably you haven’t read Moldbug. They are both long, but if you’ve got a week to kill, I would start with either A Gentle Introduction or Letter to an Open Minded Progressive. Ideally, read them both in full.

Both culminate with different versions of his plan to reboot the USG, which can be skipped to here:

If you really think a Republican take over of the statehouse is going to make any difference, I suggest spending some time with this 3 part series on Ron Paul and How to Defeat the USG (part 1 is here):

Appologies, if I am pointing you in the direction of things you’ve already read and are familiar with. Although if that is the case, I am at a bit of a loss as to why you aren’t more familiar with both his critique of democracy and his plan for a reboot…

I just wrote a long reply with links and my stupid iPad ate it, so this will be more brief!

Arguably, if you haven’t read MM on the “challenge of improving democracy”, you haven’t read MM.

You self identify as a Neoreactionary, have you read Moldbug’s core texts A Gentle Introduction and A Letter to an Open Minded Progressive in full? If not I would pick one and start there. If you want to skip to the Reeboot stuff go to part 8 of OL or 9a of GI. ButI would suggest reading the whole thing.

For a quick fix on democracy as an adaptive fiction try this post and comment thread:

Sorry if I’m pointing you at all the canonical stuff you are already familiar with, although if you are I am at a bit of a loss as to why you aren’t more hostile to Democracy, especially as you self identify as NRx.